Ciena Corp (CIEN)

[chmcnfunds]

Ciena loss shrinks but adjusted earnings miss view

Dec. 12, 2013, 8:11 a.m. EST
By Everdeen Mason

Ciena Corp.'s fiscal fourth-quarter loss narrowed as the telecom-equipment company's revenue grew faster than expected, but margin pressures kept the bottom-line improvements in check.

Shares fell 12% to $20.25 in premarket trading as adjusted earning fell short of Wall Street expectations. Through Wednesday's close, Ciena's stock is up 47% in the past 12 months.

Ciena's revenue has improved over the past year as the optical-communications equipment market shows signs of a recovery. But depreciation of equipment, furniture and fixtures; amortization of leasehold improvements; provisions for excess inventory and other items have weighed heavily on Ciena's bottom line.

Revenue increased 25% to $583.4 million in the latest quarter, beating the company's prior estimate of $550 million to $580 million. Meanwhile, its gross margin narrowed to 39.7% from 42.4% as input costs increased 29% to $351.7 million.

For the quarter ended Oct. 31, Ciena reported a loss of $9.8 million, or nine cents a share, versus a year-earlier loss of $38.8 million, or 39 cents a share. Excluding unusual items, Ciena recorded a profit of 16 cents a share, compared with a loss of seven cents a share last year.

Analysts polled by Thomson Reuters had most recently forecast earnings of 24 cents a share.

By segment, converged packet optical revenue jumped 47% to $350.9 million, while software and services revenue rose 9.6% to $118.7 million.

For the current quarter, Ciena expects revenue between $515 million and $545 million. Analysts expected revenue of $538 million.

The company also unveiled a pending stock transfer to the New York Stock Exchange from the Nasdaq, effective Dec. 23.
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